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2999 WordsOct 10th, 201412 Pages

FNCE 370v8: Assignment 4

Assignment 4 is worth 5% of your final mark. Complete and submit Assignment 4 after you complete Lesson 12.

There are 12 questions in this assignment. The break-down of marks for each question is presented in the table below. Please show all your work as this will help the marker give you part marks as well as serve as a good study aid as you prepare for the Final Examination.

FNCE 101 Problem Set #3
Due: 11-5-12
1.
A) The private savings would not change, in the long-run, because since consumers tend to be consumption-smoothers, there would be a natural switch from the consumption of foreign goods to the consumption of domestic goods. However, in the short-run, there would be a decrease in savings because the demand for domestic goods would increase thus increasing domestic prices and since consumers are consumption-smoothers, they would dip into private savings…

FNCE 4820 Fall 2013 NAME__________________
David M. Gross, Ph.D.
Midterm 1 with Answers
Answer the questions in the space below. Written answer requires no more than a few sentences.
Show your work to receive partial credit. Points are as indicated.
1. (9 Points) Briefly define the following in the context of holding a bond.
(a) Interest-Rate Risk
Risk of price change due to changes in the bond’s yield.
(b) Inflation Risk
Risk of earning a lower-than-expected real return if inflation…